Question 3: (12.5 points) Consider the CEO of Zeus Engineering who knows very well how to use the Bloomberg Terminals and download the most contemporary data in the global financial markets. He calculates the historical returns by employing the CAPM MODEL. Consider the following table and assist him in order to estimate the following relationships for Kronos (K) and Titan (T) Multinational Companies (MNE) respectively. YEAR MNE (K) MNE (T) MARKET 2016 24% 13% 22% 2017 29% 17% 10% 2018 -6% 15% 12% 2019 13% 14% 19% 2020 22% 11% 15% Assume that the Risk-Free Rate is 4%. 1. What are the betas of the MNEs K and T respectively? 2. What are the required rates of return for MNEs K and T? 3. Are stocks for the MNE K and T aggressive or defensive stocks? 4. What is the slope of the SML and CML Lines for MNE stocks K and T respectively? 5. Draw them carefully and provide comments and explanations for the Sharpes and Treynors Ratios. 6. What is the beta of the portfolio consisting of equal proportions of betas of stocks K and T respectively? 7. How different is the CAPM model from the Mean Variance Model? 8. What is the Efficient Frontier? Carefully explain your answer.